Page CEO BULLETIN & NEWSLETTERS

None.

BOARD MEMBER REQUESTS & INFORMATIONAL ITEMS

5 BMR/IBMR Weekly Reports: 07/23/20

6Memo from David Cahen, Risk Manager, dated 7/15/20, regarding Directorsand Officers Insurance.

9Memo from David Cahen, Risk Manager, dated 7/16/20, regarding RiskManagement Communication.

INCOMING BOARD CORRESPONDENCE

14 Board Correspondence Weekly Report: 07/23/20

15Email from Tina Paez, to the Board of Directors and Community Leaders,dated 7/16/20, regarding the Mayfair Neighborhood in East San Jose (C-20-0109).

17Email from Robert Fernandez, to the Board of Directors and CommunityLeaders, dated 7/16/20, regarding Olinder Neighborhood Ongoing Issues (C-20-0110).

18 Email from Richard McMurtry, to the Board of Directors, dated 7/20/20,regarding Environmental Education Program (C-20-0112).

21 Email from Don Lieberman, to the Board of Directors, dated 7/21/20,regarding Anderson New Discharge Pipe (C-20-0113).

24 Email from Iris Stewart-Frey, to the Board of Directors, dated 7/21/20,regarding the Safe, Clean Water Program (C-20-0114).

25 Email from E. Barron, to the Board of Directors, dated 7/21/20, regarding theSafe, Clean Water Program (C-20-0115).

26 Email from Suzanne Morrone, to the Board of Directors, dated 7/21/20,regarding Increasing Problems with Pollution and Encampments (C-20-0116).

29 Email from Cynthia Jones, to Director Keegan, dated 7/21/20, regardingKeeping Neighborhoods Clean and Safe (C-20-0117).

32 Email from Prakash Arunkundrum, to the Board of Directors, dated 7/21/20,regarding Homeless Activity along Coyote Creek (C-20-0118).

Board Policy EL-7 Communication and Support to the BoardThe BAOs shall inform and support the Board in its work.

NON-AGENDAJuly 24, 2020

1

OUTGOING BOARD CORRESPONDENCE

36 Email from Director Keegan, to Don Lieberman, dated 7/16/20, regardingEvaluation for Home Elevation (C-20-0098).

38 Email from Director Kremen, to Bill Wells, dated 7/16/20, regardingEarthquakes in the California Delta (C-20-0099).

46 Email from Chair Hsueh, to Deborah Jacobs, dated 7/20/20, regarding RetireeHealth Coverage (C-20-0100).

49 Email from Director Keegan, to Cynthia Jones, dated 7/20/20, regardingHomeless Activity along Coyote Creek (C-20-0101).

51 Email from Director Keegan, to Kimberlee Stephens, dated 7/20/20, regardingHomeless Activity along Coyote Creek (C-20-0102).

53 Email from Director Keegan, to Anne Loera, dated 7/20/20, regardingHomeless Activity along Coyote Creek (C-20-0103).

55 Email from Director Keegan, to Elizabeth Schroeder, dated 7/20/20, regardingHomeless Activity along Coyote Creek (C-20-0104).

57

Letter from Chair Hsueh, to Rick Lanman, President, GCRCD, regardingGuadalupe-Coyote Resource Conservation District’s (GCRCD) withdrawal from the Fish and Aquatic Habitat Collaborative Effort (FAHCE) SettlementAgreement.

2

Board correspondence has been removed from the online posting of the Non-Agenda to protect personal contact information. Lengthy reports/attachments may also be removed due to file size limitations. Copies of board correspondence and/or reports/attachments are available by submitting a public records request to publicrecords@valleywater.org.

CEO BULLETIN

3

BOARD MEMBER REQUESTS and Informational Items

4

Report Name: Board Member Requests

1

Request Request Date

Director BAO/Chief Staff Description 20 Days DueDate

Expected Completion

Date

Disposition

I-20-0013 07/14/20 Varela Callender Taylor

Narayanan

Director Varela requests that staff

contact Mr. Bergin in the below

email (via email) to explain the

District's portion of his tax bill,

attached.

08/03/20

5

MEMORANDUM FC 14 (08-21-19)

TO: Board of Directors and PFFC FROM: David Cahen SUBJECT: Directors and Officers Insurance DATE: July 16, 2020

A member of the PFFC requested information regarding errors and omissions coverage from District Counsel. As a result, staff has been requested to prepare a memo to provide an understanding to members of the Board of Directors and PFFC regarding activities covered under the District’s Directors’ and Officers’ policy when the Board and/or PFFC member participates in District or PFFC activities. Issue Who is covered and what are the types of acts generally covered under a Directors & Officers (D&O) insurance policy? Who is Covered? With respect to directors & officers, the District’s policy states:

We will pay on behalf of the Insured those sums in excess of the retained limit that the Insured becomes legally obligated to pay for loss arising out of a public officials wrongful act to which this insurance applies and which takes place in the coverage territory during the policy period.

Further, the definition of directors and officers states:

“Directors and Executive Officers: An individual while appointed as a Director or Executive Officer but only with respect to their duties as your officer or director and while acting within the course and scope of their authority.

Elected or Appointed Officials: An elected or appointed official of any board, commission or agency of yours, but only with respect to their duties and while acting within the course and scope of their authority as an elected or appointed official.”

Board members of the District and the Public Facilities Financing Corporation (PFFC) are included as a full named insured under the District’s policy, per the coverage language above. Because of this, full coverage applies to them while working on behalf of the District. What types of acts would be covered? The policy is broad and would cover the vast majority of claims against a Board or PFFC member. Generally, the policy covers the Director or Officer for any ‘public officials wrongful act’ not excluded by the policy. A ‘public officials wrongful act’ is defined broadly as:

a. Breach of duty by an Insured, neglect, error, misstatement, misleading statement, or omission by an Insured; or

b. Violation of civil rights protected under 42 USC 1981 et seq., or any similar federal, state, or local law by an Insured; or

c. Violation of any state civil rights law that arises out of the discharge of duties for the Name Insured

DocuSign Envelope ID: AF3C0F99-E88B-480E-B50D-0E0971055A53

6

Board of Directors and PFFC Page 2 July 16, 2020 The types of claims that would not be covered would include previously known claims and fraudulent/dishonest conduct on the part of the Board. Some of the more specific types of acts covered include: Wrongful Acts In the context of D&O policy claims, a wrongful act may include violation of a statute, improper self-dealing, conflict of interest, fraudulent financial statements, a tort, violation of the articles of incorporation of by-laws or transactions with companies in which the officers or directors have a personal interest. A misrepresentation as to the company’s business or finances may qualify as a wrongful act for purposes of a D&O claim. For example, if a corporation misrepresented a company’s financial health in order to secure funding from an investor, the investor may later sue the company and its directors for those misrepresentations. A D&O policy would provide coverage for the costs of defending this lawsuit and any resulting settlement or judgment against the corporation and its directors. Improper Management Suits Officers and directors may also be sued for improper management of the company’s finances. This may include inefficient administration of the company that results in losses or extending credit where it is not warranted. This may also arise when a company sells its assets for an unreasonably low price. If a company has a piece of property valued at $1,000,000, for example, and it sells it for $500,000, a shareholder may sue for financial mismanagement if the sale was made to someone connected to the directors or officers, there may be an additional claim for improper self-dealing. As above, D&O policy would indemnify the cost of the lawsuit and any settlement or award. Errors in Judgment There are more specialized forms of coverage should officers or directors make mistakes or errors in judgment. This could arise in a number of contexts, such a disseminating false or misleading information, disclosing material facts, or authorizing false or misleading reports. It may also come about when a company is allowed to make improper guarantees. For example, if a supplement company promises that its elixir will cure a certain ailment — without proof to back up those claims — then customers may sue when the promise proves to be false. A D&O policy would provide coverage for this lawsuit. There is also specialized coverage option known as Errors and Omissions coverage for human errors that result in a defect in a company’s products or services. This type of coverage can extend beyond solely Directors and Officers. Directors and Officers are covered under the District’s Errors and Omissions policy. Negligence of Duties A director or officer may also be sued for negligence in the performance of his duties. This may result from failing to file annual reports, failing to supervise, regular absence from meetings, and failing to inspect the company’s books and records. An example of negligence may be if an employee is embezzling from the company, and the directors and officers fail to find the embezzlement and stop it. The company’s shareholders may sue for damages that arose from this negligence; the lawsuit would be covered by a D&O policy.

DocuSign Envelope ID: AF3C0F99-E88B-480E-B50D-0E0971055A53

7

Board of Directors and PFFC Page 3 July 16, 2020 Coverage of Fines, Penalties, and Other Legal Costs D&O policy claims examples can be found in other contexts, such as government investigations. When a government or regulatory agency investigates a corporation, the costs may be high, even if no wrongdoing is found. For example, if a company is suspected of violating laws relating to disposal of toxic waste, the investigation may take years to complete and may require thousands of hours worth of attorney fees. A D&O policy may cover the cost of the investigation, as well as any penalty levied by the government. ___________________________ David Cahen Risk Manager

DocuSign Envelope ID: AF3C0F99-E88B-480E-B50D-0E0971055A53

8

MEMORANDUM FC 14 (02-08-19)

TO: Board of Directors FROM: David Cahen

Risk Manager SUBJECT: Risk Management Communication DATE: July 15, 2020

The purpose of this memorandum is to provide you a copy of recent Risk Management staff’s communication with individuals that have filed a claim against the District. Please find the following attachment: 1) July 13, 2020 confirmation letter to Mr. Robert Gearhead (District 7) For additional information, please contact me at 408-630-2213. _________________________________ David Cahen Risk Manager

DocuSign Envelope ID: 1F164F60-4877-4982-8CC2-5A14FBEB0768

9

10

11

12